Outsourcing FTA Dispute Settlement Administration to Third-Party International Arbitral Institutions: Opportunities and the Role of the Permanent Court of Arbitration

Abstract

With the future viability of WTO dispute settlement being uncertain, states may be required to rely on the dispute settlement mechanisms of their FTAs to provide a forum for litigating international trade disputes. Given however that these mechanisms have historically been inefficient and ineffective, it would be judicious for states to consider delegating the administrative functions of FTA dispute settlement to a third-party arbitral institution in order to remedy these deficiencies. This article analyzes both the factors impelling states to consider contracting out the administrative function of FTA dispute settlement, as well as the potential benefits states can reap by pursuing this strategy. Assessing the strengths and potential drawbacks of delegating FTA dispute settlement administration to the Permanent Court of Arbitration in particular, this article argues that the PCA is well positioned to undertake effective and efficient administration of FTA trade disputes.